41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 134
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
REMUNERATION COMMITTEE continued
Finally, Unite has continued to demonstrate its commitment
to the health and safety of employees, visitors and
students, with management working proactively to address
issues faced and ensure there is a strong safety culture
across the Group.
Long-term incentives
In addition to the above successes, there have also
been challenges for the Group, with year-on-year falls in
Higher Education trust and employee engagement scores
driven by factors including the implementation of a new
operating model and above average employee turnover.
These outcomes have commensurately impacted incentive
outcomes for 2022, and will be areas of particular focus for
the 2023 annual bonus. Ongoing cost-of-living pressures
faced by Unite’s stakeholders have also been a key area
of focus, and the Committee has been pleased with the
executive team’s leadership in this area, in particular
around the support provided to our dedicated and
hardworking frontline colleagues (further details on which
are included throughout this report).
LTIP awards made in April 2020 reached the end of their
performance period as at 31 December 2022. These
awards were based equally on absolute EPS, relative TSR
and relative TAR, with Unite’s performance for both the
TAR and TSR elements compared to the constituents of the
FTSE350 Real Estate Supersector Index. Over the threeyear performance period Unite’s relative TSR ranked just
below median versus the comparator group (equating to 0%
vesting), whilst EPS performance was below the threshold
target (0% vesting). Vesting of the relative TAR element
will be finalised following the publication of comparator
results over the coming months, with the latest interim
performance assessment suggesting that Unite is currently
ranked just below median. Overall estimated vesting of the
2020 LTIP is therefore 0%. Further details are included on
page 153.
Salaries
As disclosed in last year’s report, following a comprehensive
review and reflecting positive feedback received in
consultation with shareholders, Executive Director salaries
were increased by the first of a planned two-stage rebasing
of 10.6% (CEO) and 7.0% (CFO) with effect from 1 January
2022. These increases took into account the considerable
increase in size, scale and complexity of the Group since
base pay levels had last been reviewed, and in respect of
the CEO, the discount which had been applied to his salary
relative to that of his predecessor back in 2016. Salary
increases across the Group averaged 3.0% in 2022, with
higher increases applied to entry level salaries reflecting
our commitment to being an accredited Real Living Wage
employer and the rates set by the Living Wage Foundation.
Annual bonus
The annual bonus scheme was operated in line with the
policy for Executive Directors in 2022. Following a review
of performance against the targets set at the start of
the year, the Committee has confirmed that Executive
Directors will each receive bonuses of 36.0% of maximum
(equating to 50.4% out of a maximum of 140% of salary).
This overall outcome reflects mixed results against both
financial and non-financial targets set at the start of the
year, with full payouts recorded under both the LTV and
customer satisfaction metrics, and an EPS outturn just
above Threshold, but with zero payouts recorded under the
other performance measures. The Committee has reviewed
this outcome in the context of overall Group performance
and believes that although some of the bonus targets were
particularly stretching this year, the outcome is both fair
and appropriate. Further details, including bonus targets
and outcomes are included on page 152.
Following the publication of TAR results by comparators
with March 2022 year-ends, the Committee confirmed the
final vesting of the 2019 LTIP awards as 36.8%, in line with
the estimate set out in last year’s report.
Also during the year, Executive Directors were each granted
an award under the LTIP in April 2022 which will vest
based on performance over the three financial years to
31 December 2024. As disclosed in last year’s report, the
Committee resolved to introduce two relevant sustainability
metrics linked to the Group’s new strategy – operational
energy intensity and EPC ratings – for these awards,
alongside absolute EPS, relative TSR and relative TAR. Any
award vesting will required to be held for an additional
two-year period. Further details on the number of shares
granted and targets are included on page 158.
Overall pay outcomes for 2022
Taken as a whole, the Committee is satisfied that overall pay
outcomes in respect of the year ended 31 December 2022
are appropriate and accordingly we have not applied any
discretion to this year’s incentive outcomes.
